This is true whether you believe in big government or small. Note that these are not politically charged issues — should the EPA be eliminated, why not privatize NASA, etc.

I am referring to the very basic services government is formed to provide.

Which is why the simply incompetant job performed by FEMA is such a cause for concern: Somehow, we seemed to have lost interest in strategic planning — there is no intelligent design (pun intended) in anything the goverment does lately.

Even more pathetic than the failure at the Federal level is the post-disaster excuse making. Echoing similar 9/11 excuses, the "No one could have seen this coming crowd" is out pushing the same canard.

The Federal Emergency Management Agency could learn some things from Wal-Mart Stores Inc.

On Wednesday, Aug. 24, when Katrina was reclassified to a storm from a tropical depression, Jason Jackson, the retailer’s director of business continuity, started camping out in Wal-Mart’s emergency command center. By Friday, when the hurricane touched down in Florida, he had been joined by 50 Wal-Mart managers and support personnel, ranging from trucking experts to loss-prevention specialists.

On Sunday, before the storm made landfall on the Gulf Coast, Mr. Jackson ordered Wal-Mart warehouses to deliver a variety of emergency supplies, from generators to dry ice to bottled water, to designated staging areas so that company stores would be able to reopen quickly if disaster struck.

Then, when the hurricane knocked out Wal-Mart’s computerized system for automatically updating store inventory levels in the area, he fielded phone calls from stores about what they needed. He also alerted a replenishment team to reorder essential products, such as mops and bleach. And by Tuesday, scores of Wal-Mart trucks, some escorted by police, were setting out to deliver 40 generators and tons of dry ice to company stores across the Gulf that had lost power.

Katrina is the biggest natural disaster Wal-Mart has ever had to confront. Initially, 126 of its stores, including 12 in the New Orleans metropolitan area, and two distribution centers were shuttered because they were in Katrina’s direct path. More than half ended up losing power, some were flooded and 89 have reported damage.

But by this past Friday, all but 15 of the idled stores had reopened. From Boutte, La., to Pass Christian, Miss., Wal-Mart frequently beat FEMA by days in getting trucks filled with emergency supplies to relief workers and citizens whose lives were upended by the storm.

Wal-Mart’s speed in responding to Katrina underscores the extent to which it and other big-box retailers like Home Depot Inc. have become key players in responding to natural disasters. Whereas FEMA has to scramble for resources, Bentonville, Ark.-based Wal-Mart has it owns trucks, distribution centers and dozens of stores in most areas of the country. It also has a specific protocol for responding to disasters, and it can activate an emergency command center to coordinate an immediate response. In the short term at least, the hurricane has helped boost Wal-Mart’s tattered image, damaged by a major sex-discrimination suit and allegations that it provides workers stingy pay and benefits.

Its astonishing that some people keep pressing the same old misinformation into service . . .

The 33-year-old Mr. Jackson, who has an undergraduate degree in
emergency management and a masters in security management, is
effectively the quartermaster-general in Wal-Mart’s efforts to provide
supplies — and quickly revive sales — in areas hit by hurricanes,
tornadoes or floods.

"People know they can get what they need at Wal-Mart," said Richard
Stinson, manager of the Wal-Mart supercenter in Laplace, La., as he
walked the aisles of his packed store late last week. "It’s because of
what we can supply, our ability to get the merchandise in the building,
the associates to get it on the shelf." Still, he noted, there are
still items — mops for flooded floors, paper plates and cups, socks,
underwear, air mattresses — he can’t keep on the shelves.

The store on Highway 61, the main street in Laplace, lost power and
water like all its neighbors in suburban New Orleans. Mr. Stinson’s
first call from his cellphone was to Mr. Jackson’s emergency center.
The center sent six loss-prevention employees, who helped secure the
building and merchandise, assisted by local sheriff’s deputies who kept
watch during the first dark nights.

The emergency center also arranged to send generators and got Mr.
Stinson’s list of immediate needs. Laplace, which is 30 miles west of
New Orleans, suffered comparatively little flooding and damage, but it
became a refuge for evacuees who had. The center also supplied such
goods as cereal, peanut butter, crackers and water to area shelters.

The store regained power four days after Katrina. Employees showed
up for work in small but growing numbers, two immediately after the
storm and 200 by late last week, out of a total of 407. Some employees
came from other Wal-Mart-owned stores, including Stephen Cortez, an
employee at a shuttered Sam’s Club in hard-hit Metairie, another New
Orleans suburb.

The store, like others up and down the Gulf Coast, has lines of
people waiting to come in. Late last week, more than 100 people waited
in 95° heat for their turn to shop. The store didn’t sell its small
supply of ice, keeping it instead to cool water for waiting customers.
Local deputies guarded the line to keep people from cutting in. At the
request of local law enforcement, the store didn’t sell alcoholic
beverages for the first three days after it opened.

Edmond Collins Jr., 37 years old, and his wife, Kywana, 29, have
come every day to restock supplies for his family and the 14 people
staying at his cousin’s house. "We’re just buying food to survive," Mr.
Collins says.

After the storm hit, Mr. Jackson also took a call from Brian Boney,
a district loss supervisor from a part of Louisiana that hadn’t been
hard hit. Mr. Boney volunteered to inspect stores in ravaged areas of
Gulfport and Pass Christian, Miss., spending the night in his car. He
reported back to Mr. Jackson that Wal-Mart needed to dispatch a full
trailer — 8,000 gallons — of bottled water and ice for police and
emergency workers in the area.

But even as Mr. Jackson continued to reroute trucks and take calls
for emergency supplies in the days after Katrina struck, he also
monitored a growing storm off the coast of Japan, where Wal-Mart owns a
controlling stake in the Seiyu retail chain. And this past weekend, he
was glued to his computer again, this time keeping tabs on Ophelia, off
the coast of Florida.

In addition to refilling its stores, Wal-Mart has donated $3 million
in basic supplies like diapers and toothbrushes to relief centers in
three states. The National Guard and relief agencies also
"commandeered" 20 trucks filled with water and other merchandise,
according to a federal relief worker who didn’t want his name used. The
U.S. Department of Homeland Security will pay Wal-Mart $5 million for
that merchandise and has a contract to be paid for supplying more.

Sheriff Bob Buckley of Union Parish, La., has nothing but praise for
Wal-Mart’s role. About 600 law-enforcement officers from around the
state gathered in Gonzalez to start rescue operations, he says, but
they had no supplies. They called Wal-Mart the day after the hurricane
hit and two days later, they got two truckloads of flashlights,
batteries, meals ready to eat, protective gear and ammunition.

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Compare & Contrast: FEMA vs Wal-MART”

Not a real fair comparison. Walmart has the benefit of having to please only the Walmart CEO and board, and it can act solely for the purpose of protecting its own interests. So it gets to direct all its resources to opening stores and delivering goods to sell. Government doesn’t have that option, and it doesn’t get to charge money to cover the costs of FEMA’s services.

Now if you allowed the government to sell water and food to the locals, maybe you’d see more money go into building FEMA’s capabilities. But who is going to favor that?

Its called taxes. Its called the federal budget. FEMA has more money at its disposal potentially to fix problems than Walmart does. What is Walmart going to do if it can’t find the money to respond to a problem? Raise prices?

Versus, what would the government do? Well as you see now, they are choosing the “borrow all you want” approach.

This is a very good and competent comparison of how Walmart does more with less.

Royce is not quite right. the Government DOES get to charge money to cover the costs of FEMA’s services. It’s called “taxes” and lately we the people have been more concerned with cutting taxes than the effect the lack of funds would have on preparedness.

Oh, that’s right, we needed to spend $1 billion PER WEEK on an elective war. Goody for us.

Taxes are collected for ALL government purposes and have to be split amongst competing priorities. Even a dedicated “disaster” tax that paid Fema’s budget would still compete with other needs within the government and would be subject to change for reasons other than the supply and demand approach that Wal-Mart follows.

Walmart takes a different approach, basically bringing into a disaster area only what it thinks it can sell. Notice also that government paid the cost of its security by providing deputies to guard supplies, and government carried the cost of infrastructure provided to it to allow it to carry goods into the region. It doesn’t provide shelter, it doesn’t provide medical care, it doesn’t fix roads, power lines, clean up pollution, or have to deal with 100 different municipalities all demanding instant attention.

Walmart is responsible for one tiny aspect of relief here. It’s just plain silly to start celebrating it as some kind of model.

This line of thinking was mentioned in this week’s Economist. Like the Economist, I too believe that the neo-cons will use this example to illustrate the failure of government in comparison to the private sector – more reason to cut taxes on the uber-wealthy. Of course, for all the reasons stated above, it’s an unfair comparison. But, certainly, there is something to be learned from the efficiency of Wal-Mart.

Interesting comments from all. I normally don’t frequent this site, but my father does and thought I might be able to provide a little insight.

First, Wal-Mart and FEMA operate under two completely different models and priorities in regards to emergency response. Can the government learn from a private sector retailer? Sure. We can all learn a lot from each other. The key is in taking the best practices and applying them appropriately to each others operations.

Second, while I am sure that many of you think that Wal-Mart/Sam’s Club sent things in to sell, I can tell you first hand that a large quantity of merchandise was donated to those counties that had literally nothing. We worked with local governments to send in donated water, ice, and food to support sheltering operations or even those locations where there was nothing (e.g. cloth and feed police officers and emegency workers, support all sizes of shelter operations like the Astrodome and Superdome). We were on the ground the day after Katrina passed (and the same day that Rita was moving through) providing these types of goods for free. This partly is attributed to what we do best; move stuff. The other part is through the relationships that we have with the local governments and officials.

Third, we close our stores/clubs/DCs in accordance with evacuation orders to 1) make sure our associates have time to leave the area safely and 2) make sure that we don’t encourage people (customers) to stay in areas that are under mandatory evacuations. Associates are allowed to leave as they need to make preparations. Let me be very clear on this one topic – NO associates are asked to or forced to stay in facilities with a hurricane coming ashore (period).

Fourth, especially following a disaster, people need basic items to live. We know this, we study this, and try our hardest to make sure the communities have what they need (for sale or donation) to keep them sustainable. Our customers and communities rely on us for this.

Fifth, we communicate well. I think this is one of the key points of our success in this ordeal. We had face to face communication that was not broken down by bureacracy. We talked to all levels of government, our competitors (e.g. Target, Home Depot, Best Buy, the Limited, etc.), the American Red Cross and other relief agencies. Most of all, we communicated well internally.

Finally, there is a much bigger piece here than just providing merchandise for sale (which I think is the model that everyone is referring to). We have to locate displaced associates, provide assistance to displaced associates, assess facilities, take care of health concerns (e.g. set up vaccination points), establish satellite communications for voice and network, manuver generators to power the facilities, ensure continued fuel supply, secure facilities, finance counselling restore facilities, find temporary housing for associates, and the list goes on and on and on. We are not engaging in rescue operations, but we are providing chainsaws to the folks that are (as an example). Most people don’t know that we provided the technicians and generator that powered the fuel depot in Mississippi that released a couple million gallons of fuel to the region that improved fuel supply or that powered a hotel, hospital, and water treatment plant in other locations. There is way to much to ever post here that will never be known, but it doesn’t need to be known either. The work served its purpose. Point being – it is way more than just moving merchandise for sale.

This is by no means all of it. There is a ‘big picture’ here that involves the public and private sector and how we can work together to take care of all victims of disaster. We have a place in that big picture and so do a lot of other organizations, companies, and government agencies.

A lot has happened and a million learnings for the entire country. The key will lie in learning from this opportunity and making it better for the next time. If you are looking for factoids or stories, you can always go to http://www.walmartfacts.com.

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Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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